MEMO POLICY

THE EU AND : BEYOND OIL Jana Kobzova and Leila Alieva

The European Union has been partly successful and wholly SUMMARY Azerbaijan poses the greatest challenge to the incoherent in promoting democracy in its neighbourhood. EU’s attempts to promote democracy in the Europeans paid lip service to democracy in North Africa and Eastern Partnership region. The regime of the Middle East, but for years they downplayed values when President has almost eliminated dealing with the region’s autocratic regimes. Last year’s political opposition through a combination democratic uprisings in North Africa and the Middle East of state repression and election manipulation – which had little to do with the EU’s democracy assistance and has harassed independent media. But the or political conditionality – pushed several of the region’s EU has struggled to go beyond co-operation authoritarian leaders from power. But in the EU’s eastern on energy issues and put more pressure on neighbourhood, democracy is in retreat: none of the six the regime to liberalise. Azerbaijan has no aspirations to join the EU, which limits the Eastern Partnership countries is fully democratic and, apart EU’s leverage. However, in the medium term from in Moldova, democracy scores in the region have been 1 the Aliyev regime is more vulnerable than worsening. Clearly, EU efforts to promote democracy are it seems: unless it reforms and diversifies, failing to work as intended. Azerbaijan’s economic model is unsustainable. Nowhere in the eastern neighbourhood is this challenge The EU should revise its current condition- more evident than in Azerbaijan. The upcoming Eurovision free approach towards and follow a “hug Song Contest, which takes place in Baku on 22–26 May, and hold” strategy – that is, hug Azerbaijan has drawn attention to the many problems and paradoxes but also hold it to its commitments to reform. this country presents for the EU’s efforts to promote The EU should support transfer of know-how, democracy. The regime of President Ilham Aliyev harbours exchange programmes and capacity-building in the public sector while re-directing more no aspirations to join the EU and is confident enough to political and financial support to grassroots ignore most of the EU’s pleas to fix the country’s democracy groups, SMEs and independent media who can put more pressure on the regime. Unless the EU takes this bolder approach towards 1 Georgia, Moldova and Ukraine are described as “hybrid regimes”, and Armenia as a Azerbaijan, it risks finding itself in the same “semi-consolidated authoritarian regimes”. Belarus and Azerbaijan joined the group position it was in the southern neighbourhood of “consolidated authoritarian regimes”. See Freedom House, Nations in Transit 2011, available at http://www.freedomhouse.org/report/nations-transit/nations- before the Arab Awakening: that of a quiet transit-2011. See also Nicu Popescu and Andrew Wilson, Turning Presence into Power: the EU in its eastern neighbourhood, European Council on Foreign Relations, supporter of autocrats. May 2011, available at http://ecfr.eu/content/entry/turning_presence_into_power_ europe_in_its_eastern_neighbourhood. 2 ECFR/57 May 2012 www.ecfr.eu THE EU AND AZERBAIJAN: BEYOND OIL A moreconfident–butvulnerableBaku Azerbaijan over the disputed region of Nagorno-Karabakh; of region disputed the over Azerbaijan the of sources main the of one also is territory, Azerbaijan’s Azerbaijan has often used its difficult geographical and and geographical difficult its used often has Azerbaijan Azerbaijan’s fortunes, especially in the last 10 years, changed Azerbaijani society. Without adjusting its relations with this Western energy companies and high oil prices. As a result, result, a As prices. oil high and companies energy Western 4  3 2  Eastern Partnership region – it seems more concerned about Eurovision Song Contest, hundreds of Baku citizens were were citizens Baku of hundreds Contest, Song Eurovision This conditionality-free approach has brought Europe few few Europe brought has approach conditionality-free This The EU is now trying to put democracy back at the heart of heart the at back democracy put to trying now is EU The Iran, in which 20–30 million continue to live, to continue Azerbaijanis million 20–30 which in Iran, In the early years after its independence in 1991, Azerbaijan Russia, which, apart from having a radar station on on station radar a having from apart which, Russia, Belarus – another systematic abuser of human rights in the in rights human of abuser systematic another – Belarus and has harassed independent media. In the run-up to the to run-up the In media. independent harassed has and combinationa stateofrepression andelection manipulation, n Georgia. and and the war with Armenia, restarted economic growth and growth economic restarted Armenia, with war the and vocal about democracy in Azerbaijan, individual member member individual Azerbaijan, in democracy about vocal geopolitical context as an excuse to tighten the political political the tighten to excuse an as context geopolitical country. To the east, Armenia is still technically at war with war at technically still is Armenia east, the To country. borders it north, the To Europe. in region combustible deficit. He has almost eliminated political opposition through expanded the society’s welfare. This was chiefly thanks to to thanks chiefly was This welfare. society’s the expanded oil-rich country, the EU risks repeating the same blunders it neighbours” areGeorgiaandespeciallyTurkey. the in operating currently are that groups Islamist radical was as poor as its other two Caucasus neighbours Armenia neighbours Caucasus two other its as poor as was recording unprecedentedgrowthof34percentin2006. with the regime in Baku without imposing conditionality. conditionality. imposing without Baku in regime the with the country’s rich oil and gas reserves, new contracts with with contracts new reserves, gas and oil rich country’s the its own energy interests and security in Azerbaijan than than Azerbaijan in security and interests energy own its its foreign policy. But while it has taken a tough approach to “good two only Azerbaijan’s neighbour. difficult a also is screws. The country is blessed with hydrocarbon riches riches hydrocarbon with blessed is country The screws. its real GDP increased threefold between 2003 and 2008, 2008, and 2003 between threefold increased GDP real its a from dropped rate poverty country’s the impressively: states and the EU institutions have in reality co-operated co-operated reality in have institutions EU the and states staggering 45 percent in 2003 to nine percent in 2010, and 2010, in percent nine to 2003 in percent 45 staggering has gradually managed to absorb the shocks of transition transition of shocks the absorb to managed gradually has has madeinitssouthernneighbourhoodthepast. for the state of democracy there. Although they have been been have they Although there. democracy of state the for forciblyevicted from their homes, which were demolished to but cursed by its location in what is probably the most most the probably is what in location its by cursed but build the Crystal Hall where the competition will take place. benefits and continues to discredit the EU in the eyes of of eyes the in EU the discredit to continues and benefits  PDF/multi0page.pdf. WDSContentServer/IW3P/IB/1995/12/01/000009265_3970311123523/Rendered/ World Bank,availableathttp://www-wds.worldbank.org/external/default/ See, forexample, available athttp://www.hrw.org/reports/2012/02/29/they-took-everything-me-0. See HumanRightsWatch,“ php?option=com_content&task=view&id=2981. Independence”, Gubad Ibadoglu,“Azerbaijan’sEconomicModel andItsDevelopmentSince Azeri Report Statistical Handbook1995–StatesoftheFormer USSR 3 But since the mid-1990s, the government government the mid-1990s, the since But They TookEverythingFromMe”,29February2012, , availableathttp://azerireport.com/index. , 4

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When Azerbaijan won the right to host this year’s Eurovision 7  6  5  2003 in what has been the first dynastical transfer of power of transfer dynastical first the been has what in 2003 21 percent. Moreover, the government has paid little little paid has government the Moreover, percent. 21 Eurovision Song Contest but 12 others who remain in in remain who others 12 but Contest Song Eurovision Ismayilova, an investigative journalist, has been the target target the been has journalist, investigative an Ismayilova, However, in the medium term, the regime is more vulnerable However, as the country has progressed in economic terms, economic in progressed has country the as However, activist Elnur Mecidli was pardoned a week before the the before week a pardoned was Mecidli Elnur activist authorities continue to deny applications of the opposition the of applications deny to continue authorities and strengthen and feed the system of political patronage patronage political of system the feed and strengthen and almost eliminated. The main television channels are are channels television main The eliminated. almost avoid tarnishing its international prestige. The hopes were hopes The prestige. international its tarnishing avoid attention to rising social injustice. Because Azerbaijan’s Azerbaijan’s Because injustice. social rising to attention government has been taking one step forward and two two and forward step one taking been has government corruption at the heart of the president’s family. The Baku The family. president’s the of heart the at corruption governance. The influx of oil money has helped the regime the helped has money oil of influx The governance. overall human rights situation is worsening. Opposition Opposition worsening. is situation rights human overall of a smear campaign since she published articles unearthing controlled by the government and journalists are regularly are journalists and government the by controlled of Ilham Aliyev – who succeeded his father in recorded the lowest economic growth among all the former the all among growth economic lowest the recorded been have and year this March since detention in remained received a presidential pardon in December 2011. But the the But 2011. December in pardon presidential a received results andindependentmediaareregularlyharassed. eesd rm jail. was from Fatullayev Eynulla released journalist the place, competition take the to was before year a ungrounded: entirely not when GDP grew at a rate of 10 percent, inflation reached reached inflation percent, 10 of rate a at grew GDP when journalists who died in 2005 and 2011 have produced no no produced have 2011 and 2005 in died who journalists than it seems. The volume of oil extracted in Azerbaijan Azerbaijan in extracted oil of volume The seems. it than to holdralliesinthecitycentreonasystematicbasis. threatened. Investigations into the deaths of two opposition the Aliyev government to moderate its actions in order to to order in actions its moderate to government Aliyev the the government has failed to translate the growth figures figures growth the translate to failed has government the steps back: despite progress on these high-profile cases, the in the former Soviet republic – to solidify his own position own his solidify to – republic Soviet former the in democratic and corruption of terms in regressed has it in Azerbaijan today and the political opposition has been been has opposition political the and today Azerbaijan in full- a towards Azerbaijan steered and presidency the in into corresponding social indicators: for example, in 2008, in example, for indicators: social corresponding into he inherited. Ilham Aliyev further consolidated power power consolidated further Aliyev Ilham inherited. he peaked in 2010 and is set to decline. In 2011, the country country the 2011, In decline. to set is and 2010 in peaked Khadija lawyers. their with communicating from prevented have journalists Two strike. hunger on gone have prison political and economic system is based on rewards for for rewards on based is system economic and political Soviet republics. Soviet Song Contest, many in Europe hoped that it would prompt would it that hoped Europe in many Contest, Song fledged autocracy. There are at least 12 political prisoners prisoners political 12 least at are There autocracy. fledged new/2012/04/decline-after-speedy-growth/. Development, Decline AfterSpeedyGrowth,23April2012,available athttp://cesd.az/ GDP growthin2011amountedto0.1percent. SeeCentreforEconomicandSocial tons less.In2012,productionisexpectedto reach 46milliontons.Azerbaijan’s In 2010,Azerbaijanproduced51milliontons ofoil;in2011,itproducedfivemillion Tağı, ajournalistforSanatnewspaper,wasassassinated inNovember2011. Monitor, wasgunneddowninhisapartment buildinginBakuMarch2005.Rafiq Elmar Huseynov,thefounderandeditorofoppositionweeklynewsmagazine after therulingofEuropeanCourtHuman Rightsthatheshouldbereleased. fabricated andmotivatedbyFatullayev’sjournalism. Hewasreleasedalmostayear of ethnichatred,drugpossessionandtaxevasion, whichwerewidelybelievedtobe Fatullayev wasimprisonedin2007oncharges ofdefamation,terrorism,incitement 7 Although it lived through 10 boom years, boom 10 through lived it Although 6 The blogger Jabbar Savalan also also Savalan Jabbar blogger The 5 loyalty rather than free political and market completion, opposition. But this approach, together with the worsening ruling elites, bureaucrats and their associates have become quality of education, the unresolved conflict over Nagorno- almost exclusive beneficiaries of the country’s oil revenues. Karabakh and the retreat of secularism in Azerbaijan’s close Azerbaijan remains as corrupt as Russia or Uganda and ally may “end up inadvertently bolstering Islamists” ranks worse than neighbouring Georgia or Armenia.8 and creating a considerable political problem in the medium or long term.13 The government has also made little effort to diversify the economy away from dependence on hydrocarbons; in fact, Azerbaijan’s budget increasingly relies on transfers from the The EU: present but timid state oil fund (SOFAZ) rather than taxes: it is expected that the share of transfers from SOFAZ in the total state budget The regime’s increasingly authoritarian tendencies have had will reach 60 percent in 2012.9 The government hopes to little effect on the EU’s approach. Europe’s main interest generate more revenue from increased gas exports, thanks in the region is stability of energy supplies and security. to its reserves and potentially by becoming the transit The Aliyev regime has allowed Western energy companies hub for Central Asia’s gas. However, experts suggest the to explore its hydrocarbon riches and supported energy income will not suffice to compensate for the decline of transit projects such as the Baku–Tbilisi–Ceyhan pipeline oil revenues.10 In short, unless it reforms and diversifies, that deliver oil to the West rather than to Russia. Thus, seen Azerbaijan’s economic model is unsustainable. as an indispensable and mostly co-operative partner in the EU’s energy security plans, Baku has managed to temper The regime has thus far managed to avoid dangerous levels those voices in the EU that were more critical of the regime of instability. Oil revenue has enabled it to placate society and instead steered co-operation towards the sectors that through social spending. Moreover, the possibility of losing are most beneficial for the current elite. one’s job has discouraged many from participating in anti- regime protests; others vote with their feet and leave to Today, the EU’s assistance to Azerbaijan amounts to almost work in Russia.11 Extreme poverty is often avoided through €50 million – more than twice as much as in 2010.14 Political extended family and friends. Moreover, the oil revenue relations are also booming: in 2011–2012, top EU leaders which is fuelling a construction boom in Baku has brought including Commission President José Manuel Barroso, new employment opportunities for thousands of people. High Representative Catherine Ashton and European Usually, this means long working hours and a salary just Enlargement Commissioner Stefan Füle all visited Baku. enough to make their ends meet – which leaves little time or During his trip to Brussels last year, President Aliyev also energy to protest. The opposition is currently united in the held a meeting with European Council President Herman broad coalition called Public Chamber, but in the absence of van Rompuy. The EU and Azerbaijan are also negotiating freedom of assembly and lack of financial resources it has so a new Association Agreement – an upgrade from the far failed to reach beyond its core supporters. Partnership and Cooperation Agreement which has been in force since 1999. Earlier this year, the EU launched However, the government’s heavy-handed tactics may talks with Baku (and Yerevan) on visa facilitation and the eventually backfire. By clamping down on independent readmission of irregular migrants in the EU. However, Baku media and repressing the secular opposition, the regime continues to cherry-pick only those projects that suit it best, has closed most of the usual channels for expressing dissent. such as those in the field of energy, and avoids those that Azerbaijan is traditionally seen as a secular society, but the are seen as a threat to the regime, such as democracy and country has in the past couple of years seen a mini-revival of human rights.15 Islam. Some young people are now more attracted to radical Islam which they see as a way to voice their disapproval Some member states such as France, Italy, Germany and of the regime.12 The government’s response has been to the UK have big economic interests in Azerbaijan, but most suppress more militant Islamist groups through occasional of them – including those with business ties – tend to avoid targeted attacks while tolerating meetings of moderate publicly criticising Azerbaijan. During his first visit to Baku Islamists in downtown Baku more than those of the secular last year and in meetings with the country’s leadership, Polish President Bronisław Komorowski offered no remarks on this topic. On the other hand, Germany has been in the firing line of Azerbaijan’s state-owned media after a series 8 Transparency International, Corruption Perceptions Index 2011, available at http:// of articles on violations of political and property rights cpi.transparency.org/cpi2011/results/#CountryResults. 9 “SOFAZ announces total revenues for 12 years”, Centre for Economic and Social Development, 7 May 2012, available at http://cesd.az/new/2012/05/sofaz-announces- total-revenues-for-12-years/. 10 Author interview in Baku, 10 April 2012. 11 According to some estimates, two million out of the country’s population of 9.5 million 13 Eldar Mamedov, “Azerbaijan: Evaluating Islamists’ Strength in Baku”, EurasiaNet.org, currently work in Russia. See, for example, “Vopros: Osobennosti azerbaydzhanskoi 9 August 2011, available at http://www.eurasianet.org/node/64018. migratsii i emigratsii”, AZE.az, 17 June 2011, available at http://aze.az/news_opros_ 14  In 2010, the EU allocated €26 million for Azerbaijan but, due to lack of absorption, osobennosti_azerbay_60571.html. only €7 million was allocated in reality. See Implementation of the Eastern 12 Arif Yunusov, “Islamic Palette of Azerbaijan”, Institute of Peace and Democracy and Partnership: Report to the meeting of Foreign Affairs Ministers, 13 December the Black Sea Trust Fund for Regional Cooperation, Baku, 2012. Radical groups are 2010, available at http://eeas.europa.eu/eastern/docs/eap_meeting_foreign_ often sponsored by the neighbouring Iran- or Dagestan-based organisations as well affairs_131210_en.pdf. as those in Saudi Arabia. See also Independent Islam and the State, International 15  EU–Azerbaijan co-operation is guided by the mutually agreed Action Plan. The Crisis Group, March 2008, available at http://www.crisisgroup.org/~/media/Files/ current one expired on 31 December 2011 but both sides agreed on an open-ended europe/191_azerbaijan_independent_islam_and_the_state.pdf. extension until the Association Agreement is signed. 3 4 ECFR/57 May 2012 www.ecfr.eu THE EU AND AZERBAIJAN: BEYOND OIL “friendly” member states while ignoring or publicly smearing According to a Baku-based European diplomat, “sanctions “sanctions diplomat, European Baku-based a to According Azerbaijan’s democracy deficit. As a result, authoritarian authoritarian result, a As deficit. democracy Azerbaijan’s 18  17  16  There is also little co-ordination between member states states member between co-ordination little also is There The lack of a more coherent EU approach makes it possible it makes approach EU coherent more a of lack The This “lack of EU leverage” narrative – which one also hearsalso onewhich leverage”narrative – EU of “lackThis Baku, and its co-operation with Azerbaijan continues as a as continues Azerbaijan with co-operation its and Baku, Brussels. The EU has rejected calls by some Azerbaijani Azerbaijani some by calls rejected has EU The Brussels. President Jerzy Buzek during their visits to Azerbaijan (all Azerbaijan to visits their during Buzek Jerzy President approach to Azerbaijan as have member states. During their fact, In Commission. European the of branches various and appeared in the German media. German the in appeared activists for political or economic sanctions on the regime. regime. the on sanctions economic or political for activists not officials, government with only met Oettinger Günther Commissioner Energy and Barroso year, last Baku to visits Christoph Strässer was denied a visa to investigate the issue government in Baku but also diluted the criticism of the the of criticism the diluted also but Baku in government conditionality-free dialogue. opponents, the importance to the EU of Azerbaijan’sof opponents,energyEUimportance thethe to attempt and rhetoric EU’s the despite short, In security. or diplomat. “Whywouldweimposesanctionsonhim?” consolidation in Baku has not affected co-operation with with co-operation affected not has Baku in consolidation of Europe rapporteur. Council Europe as of role his in Azerbaijan in prisoners political of of democracy, apart from a few statements”, says one Baku- one says statements”, few a from apart democracy, of officials. “We are all queuing to meet Aliyev”, says another says Aliyev”, meet to queuing all are “We officials. resources and fears of another flare-up in Nagorno-Karabakh energy as such issues other on government Baku the with regime voiced by Füle, Ashton and European Parliament Parliament European and Ashton Füle, by voiced regime will not work in Azerbaijan” because “the EU has no leverage mostly due to fears that this would jeopardise co-operationjeopardisewould this that fears to due mostly met withoppositionorlocalactivists). the opposition or civic activists. This not only pleased the the pleased only not This activists. civic or opposition the their in incoherent as been often have institutions EU the the possibility of imposing visa bans or targeted economic economic targeted or bans visa imposing of possibility the those officials and member states who dare to criticise criticise to dare who states member and officials those sanctionsthoseonofficials involvedhuman inrights abuses, considered seriously not has EU the Belarus, including Azerbaijanin thananyinother Eastern Partnership country, European among shared widely view a – country” this in have pushed human rights from the EU’s top agenda with with agenda top EU’s the from rights human pushed have pressure on the government to soften the attitude towards its for Baku to ignore criticism and pursue good relations with relations good pursue and criticism ignore to Baku for from Azerbaijani officials – seems to have become a self- a fulfilling become prophecy. have to Although seems there – are officials more Azerbaijani political from prisoners by some officials including Commissioner Füle to put more put toofficialsincludingCommissioner Fülesome by based expert. issues on persistence EU’s the felt never “I’ve timid. been definition ofpoliticalprisoners,whichherefused. He waslaterinvitedbytheAzerbaijanigovernment tovisitBakudiscussthe 27 April2012,availableathttp://www.yeniazerbaycan.com/news/15639.html. Hitler. See“Diplomatiksifariş:müxalif Azerbaijani politicianscriticalofPresidentAliyev wereplacednexttothoseofAdolf newspaper and forcedevictionsintherun-uptoEurovision SongContest,thestate-owned Following aseriesofarticlesintheGermanmedia onAzerbaijan’sdemocracydeficit in March–April2012. Unless otherwisestated, quotescomefromauthors’interviewsinBaku andBrussels Yeni Azerbaycan 18 publishedastoryinwhichpicturesofGerman and 17 In general, however, the EU has has EU the however, general, In ət, “Eurovision”ahazırol!”YeniAzerbaycan 16 German parliamentarian German , Azerbaijan’s oil revenues would suffice to cover the costs costs the cover to suffice would important, revenues is oil Azerbaijan’s efficiency energy improving although And Few conditions,fewresults While co-operation in the energy sector works well at the the at well works sector energy the in co-operation While 20 19  21  22  European dictatorship”,complainsoneBaku-basedanalyst. U sitne oue o amnsrtv rfr ad co- and reform administrative on focuses assistance EU The EU’s unconditional co-operation with the autocratic autocratic the with co-operation unconditional EU’s The Little progress has been made in other areas either. Baku Baku either. areas other in made been has progress Little However, the pipeline is probably going to be shelved shelved be to going probably is pipeline the However, But even this approach has brought limited results. Much Much results. limited brought has approach this even But Meanwhile, the EU spends “peanuts”, as one EU official puts agreement. Talks on the new Association Agreement are also Modernisation and diversification of Azerbaijan’s economy Azerbaijan’s of diversification and Modernisation generalised systemofpreferences. currently marred in seemingly endless discussions about about discussions endless seemingly in marred currently strategy’s the of One Europe. to gas of supplies to diversify initiative Corridor Gas Southern EU’s the of elements of Azerbaijan, the EU itself has achieved far more modest modest more far achieved has itself EU the Azerbaijan, of our country as a Middle Eastern autocracy rather than a than rather autocracy Eastern Middle a as country our operation in the energy sector but has yet to bear fruit. fruit. bear to yet has but sector energy the in operation regime in Baku also runs against the “more for more” more” for “more the against runs also Baku in regime related totheseprojects,includingpossibleEUconsultants. key the of one remain resources gas country’s The results. membership. But Azerbaijan is no closer to joining the WTO to Karabakh war refugees. war Karabakh to that have little to do with promoting political pluralism or or pluralism political promoting with do to little have that free member. a WTO a not is Azerbaijan because agreement trade without signed be will Agreement concluded, is Association it the if even Nagorno-Karabakh; of status the years. 10 last the over euros of millions spent has EU the than it was a few years ago – in fact, Baku is still under- still is Baku fact, in – ago years few a was it than it, on other areas such as supporting independent media or media independent supporting as such areas other on it, readmission the on negotiations on heels its dragging is strengthening civil society, such as improvements in the the in improvements as such society, civil strengthening its soft power in Azerbaijan. “Increasingly, the EU treats treats EU the “Increasingly, Azerbaijan. in power soft its is unthinkable without World Trade Organization (WTO) (WTO) Organization Trade World without unthinkable is penitentiary system, environmental projects or assistance assistance or projects environmental system, penitentiary principle, which the EU vowed to make the cornerstone of cornerstone the make to vowed EU the which principle, level of individual EU energy giants and the government government the and giants energy EU individual of level local civil society. Even this money is used mainly on issues on mainly used is money this Even society. civil local using many of the quotas it was allocated under the EU’s EU’s the under allocated was it quotas the of many using flagship projects is the Nabucco gas pipeline, on which which on pipeline, gas Nabucco the is projects flagship because Baku seems to favour other competing initiatives. competing other favour to seems Baku because  Project (Part One)”, Vladimir Socor, “Trans-Anatolia Gas Pipeline: Wider Implications of Azerbaijan’s news]=38846&tx_ttnews[backPid]=27&cHash=64855099ecf557ee3f24b3d8430789f0. available at http://www.jamestown.org/programs/edm/single/?tx_ttnews[tt_ contention. (currently at27percentinsteadoftheWTO’s 5percent)areanotherpointof joined theorganisationwith“developedcountry” country” despitethefactthatallotherpost-SovietstatesbecameWTOmembers main pointofcontentionisBaku’sdemandthatitjoinstheWTOasa“developing continues inanumberofsectors,thenegotiationsarehardlymovingforward.The Although AzerbaijanhasadoptedanumberofWTOstandardsandapproximation 2007–2013 period,€8 millionwillreachlocalcivilsociety. EU officialsestimatethat outof€68millionearmarkedforAzerbaijan inthe and theEuropeanBankforReconstruction Development. billion loanofferedtotheprojectbyEuropean InvestmentBank,theWorldBank The EUitselfearmarked€200millionforthe projectandhelpedfacilitatethe€4 Eurasia Daily Monitor 22 As a result, the EU is losing losing is EU the result, a As , Volume 9, Issue 3, 5 January 2012, 19 status.Agriculturesubsidies

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its neighbourhood policy last year. The idea was to pursue an individualised approach towards the neighbourhood The case of Belarus: Many conditions, states based on their demonstrated will to reform and too little to show for it democratise. But, in the absence of such will on the side of the government, the EU ends up simply co-operating The 2010–2011 crackdown on civil society and on economic issues such as energy rather than trying to imprisonment of 12 politicians and activists in Belarus overcome obstacles to reform. The EU’s timid approach provoked a strong reaction from Brussels: the EU froze to Azerbaijan – a striking contrast with the stand it took almost all political relations with Minsk, imposed a visa against the Lukashenka regime in Minsk (see the box) – ban on more than 250 people and adopted targeted calls into question the coherence of EU policy in the Eastern economic sanctions on a number of companies as Partnership region. well as three businessmen thought to be the regime’s “bagmen”. Simultaneously, the EU expanded the pool of funding available for local civil society and a number When “more for more” is not enough of EU political leaders met the Belarusian opposition politicians and activists to publicly express their The EU has a whole range of tools and a blueprint it can support. use to assist countries that want to join the EU through the period of painful yet necessary transition. In such cases, the Although the regime released two of the 12 prisoners EU’s political conditionality can work as powerful leverage earlier this year, the strict political conditionality that on unruly governments. The Balkan wars also helped the the EU has applied has for various reasons so far failed EU perfect the toolbox for countries emerging from conflict. to produce results and push President Alyaksandr But the EU has been struggling to find a way to deal with Lukashenka to liberalise. The EU’s economic leverage countries that are neither willing to join it nor trying to on Minsk is rather limited: Belarus’s economy is heavily create internal stability and prevent the eruption of violent dependent on Russian markets and Moscow’s support conflict. In the Eastern Partnership region, both Belarus in the form of subsidised energy products. and Azerbaijan fall into this category: as the case of Minsk shows, pure conditionality based on the principle of “more The EU could ratchet up pressure on Minsk by banning for more” may actually lead to less interaction with the EU the import of energy products from Belarus – one of and undermine the already limited influence that the EU the country’s most important exports – but few EU has in these countries. In its relations with Baku, the EU member states are eager to do so. Some of them, such could face similar problems. as Latvia, fear their own economic ties would suffer badly; moreover, experts point out that these measures Strict application of conditionality with Azerbaijan may be would have little effect anyway thanks to Belarus’s more harmful to civil society than to the authorities in Baku, membership in the Common Economic Area with who, because of energy revenues, do not in any case need Russia and Kazakhstan and to Moscow’s continued EU financial aid. The EU has less leverage than in Armenia political support for Lukashenka.24 or Georgia. Unlike Tbilisi, which aspires to eventual EU membership, the authorities in Baku see their relationship The discussion about EU sanctions has also polarised with the EU through the lens of possible economic gains and civil society and the opposition in Belarus: while some as part of its multi-faceted foreign policy rather than as a of them argue that the EU should impose even harsher means of democratisation and greater integration with the measures, others say these actions would only lead EU markets. The EU’s financial levers are also limited: in to the isolation of Belarus as a whole rather than the 2012, the EU’s offer of €31 million in exchange for social and key figures in the Lukashenka regime. They also point economic reforms was dwarfed by the almost €43 million out that support for EU integration among ordinary that Azerbaijan earns every day from oil.23 Belarusians has declined since the EU imposed sanctions.25 What is clear is that, for the moment, even However, the EU does have some leverage. If Azerbaijan the EU’s tougher stance has brought few results. is to diversify its oil-based economy, it will need the EU – rather than Iran or Russia – for technology and know-how. Much of this can be provided by European companies, but unless it improves its governance and judicial system, Azerbaijan will struggle to attract firms into sectors other than extraction industries. Talk about the EU’s energy

dependence on this South Caucasus country as the only 24 Dzianis Melyantsou, “Where do EU sanctions lead?”, Belarusian Institute for Strategic Studies, 25 January 2012, available at http://belinstitute.eu/index.php?option=com_ content&view=article&id=1142%3A2012-01-23-21-09-01&catid=3%3Aeu&Itemid=2 8&lang=en. 25 According to polling data from the Independent Institute for Social, Economic and 23 On EU assistance to Azerbaijan, see http://ec.europa.eu/europeaid/where/ Political Studies, from March 2012, 47 percent of Belarusians supported Russia and neighbourhood/country-cooperation/azerbaijan/azerbaijan_en.htm. On Azerbaijan’s 37 percent the EU, a significant change from more-or-less equal support for Moscow revenue from oil exports, see “How much money Azerbaijan Oil Fund has?”, Center and Brussels after Belarus’s presidential election in December 2010. See “Support for for Economic and Social Development, 11 February 2012, available at http://cesd.az/ EU in Serious Decline”, Belarusian Institute for Strategic Studies, polling memo, 23 new/2012/02/azeri-oil-fund%E2%80%99s-assets-reached-298-billion-in-2011/. April 2012, available at http://belinstitute.eu/images/doc-pdf/pm022012en.html. 5 6 ECFR/57 May 2012 www.ecfr.eu THE EU AND AZERBAIJAN: BEYOND OIL “Hugging...” At the moment, the EU’s best chance for more reform in in reform Azerbaijan is more continued engagement for – rather than chance isolation – best EU’s the moment, the At Europe which leverage potential create factors these All Azerbaijan. In fact, as the country’s first trading partner, the EU to steer its finances in a way that brings more benefits to EU’s financial package for Azerbaijan should be used on on used be should Azerbaijan for package financial EU’s EU is potentially the most powerful external economic actor In particular, in its co-operation with the Azerbaijani Azerbaijani the with co-operation its in particular, In value ratherthanintoequipmentorinfrastructureprojects. areas such as educational reform. More diplomatic efforts efforts diplomatic More reform. educational as such areas or law of rule governance, as such transformation, and autocratic tendencies. It can do so by pursuing a “hug and “hug a pursuing by so do can It tendencies. autocratic wider the ignores deliveries gas Russian to alternative government, but they do require a concerted effort by the the by effort concerted a require do they but government, government, the EU should prioritise initiatives aimed at at aimed initiatives prioritise should EU the government, experts, in all stages of the process. A greater part of the the of part greater A process. the of stages all in experts, those as well as economy, country’s the of diversification continue to use its dialogue with the government to assist assist to government the with dialogue its use to continue entrepreneurs andsocietyingeneral. and market energy liberalising gradually EU’s the context: elite is Western-oriented: although they often benefit from benefit often they although Western-oriented: is elite organised) NGOs and non-state actors, such as independent co-operation to comes it When society. broader to outreach of the Baku government. At the practical level, the EU should not require an increase in the EU’s assistance to the Baku Baku the to assistance EU’s the in increase an require not negotiations on visa facilitation and readmission agreements, should has EU the funds limited the government, the with through influence indirect its increase can EU the where new alternatives to pipelined gas – be it from Russia or or Russia from it be – gas pipelined to alternatives new the wholecountryratherthan justtheregime. the conclusion of which should become the precondition for public the in capacity-building know-how, of transfer the to pressure their government to adopt them: civil society, society, civil them: adopt to government their pressure to will who Azerbaijan, in friends natural its are who those the corrupt system at home, their savings are in European in are savings their home, at system corrupt the including the Association Agreement. These measures do do measures These Agreement. Association the including signing any other significant agreements with Azerbaijan Azerbaijan with agreements significant other any signing insist on participation of the real (as opposed to government- mid-level and junior for programmes exchange and sector in areas that are important for Azerbaijan’s modernisation Azerbaijan’s for important are that areas in look also should EU The reform. to commitments its to it in Azerbaijan. Moreover, as in Russia, the country’s political should also be focused on helping to achieve progress on on progress achieve to helping on focused be also should should use more forcefully to make Baku restrain its its restrain Baku make to forcefully more use should hold” strategy – that is, hugging Azerbaijan but also holding have propertyinEurope. liquefied natural gas and shale gas will in the future offer offer future the in will gas shale and gas natural liquefied bureaucrats – but it should carefully monitor results and and results monitor carefully should it but – bureaucrats added greater have can assistance its where invested be benefit the most from the reforms and who are most likely most are who and reforms the from most the benefit with contacts more cultivate and government the beyond banks, their children study in European schools and they they and schools European in study children their banks, “Hugging” Azerbaijan does not mean embracing only its its only embracing mean not does Azerbaijan “Hugging” “matrix” for Azerbaijan is a step in the right direction as it links ...but holding Azerbaijan’s national platform of the Eastern Partnership Partnership Eastern the of platform national Azerbaijan’s While “hugging” Azerbaijan, Europe should also hold it to to it hold also should Europe Azerbaijan, “hugging” While 27 26  30  29  28 Eurovision Song Contest because the regime hopes that less be should EU The Democracy. for Endowment European If the regime expresses no interest in EU aid or continues to Instrument (and the future European Neighbourhood Neighbourhood the up, set is it European when or, Facility Society Civil Instrument), future the (and Instrument n r-iet h fns oad lcl ii society. civil local towards funds the re-direct and also establish an internal contact group among relevant EU relevant among group contact internal an establish also action plans. Civil Society Forum and local watchdogs. local and Forum Society Civil government. The EU should throw more political and and political more throw should EU The government. closely with the United States and consider issuing joint joint issuing consider and States United the with closely on the regime domestically and create evolutionary change evolutionary create and domestically regime the on confidence in their own capacity to hold their government government their hold to capacity own their in confidence work to develop greater co-operation and interaction with with interaction and co-operation greater develop to work responsible. explaining in job better a do to needs also EU The reform. oe oa i dmnig rae pltcl lrls – pluralism political greater demanding in vocal more monitor the government’s actions, the EU should also also should EU the actions, government’s the monitor more co-operation from Turkey on pushing Azerbaijan to to Azerbaijan pushing on Turkey from co-operation more this will be especially crucial in the months following the the following months the in crucial especially be will this the commitments it made by joining the ENP and agreeing and ENP the joining by made it commitments the needn mda r rfsinl associations. professional or media independent grassroots interest groups, NGOs, small resourced and medium-sized enterprises, poorly include These future. the in including the European Neighbourhood and Partnership Partnership and Neighbourhood European the including international attention will give it more leeway to “deal” with institutions and directorates-general (led by the European European the by (led directorates-general and institutions its assistance to the government’s performance on reform. statements on human rights abuses. Given the closeness closeness the Given abuses. rights human on statements increase the trust of local actors towards the EU and their their and EU the towards actors local of trust the increase to order in society Azerbaijani to demands and actions its underperform, the EU should apply “adjusted conditionality” pool the funds available through a number of instruments instruments of number a through available should funds the EU pool the groups, these for support greater provide uncomfortable voices. Here, the EU could partner more more partner could EU the Here, voices. uncomfortable financial support behind those who can put more pressure more put can who those behind support financial between Baku and Ankara, the EU should also try to solicit to try also should EU the Ankara, and Baku between   EMO/12/331&format=HTML&aged=0&language=EN&guiLanguage=en. May 2012,availableathttp://europa.eu/rapid/pressReleasesAction.do?reference=M See “ENPPackage,CountryProgressReport–Azerbaijan”,EuropeanCommission,15 partnership-through-empowerment. easternpartnership.org/publication/2011-01-25/azerbaijan-and-eastern-partnership- empowerment”, EaPCommunity,25January2011,availableathttp://www. Leila Alieva,“AzerbaijanandEasternPartnership:partnershipthrough condition. politics/2011-04-22/arab-revolutions-case-better-eu-approach-east-and-adjusted- 22 April2011,availableathttp://www.easternpartnership.org/publication/ for betterEUapproachtotheEastandadjusted conditionality”,EaPCommunity, download/2006/2006_Alieva.pdf; andLeila Alieva,“TheArabrevolutions:thecase Research, Discussionpaper,December2006, availableathttp://www.cap.lmu.de/ Leila Alieva,“EUandtheSouthCaucasus”,CAP/Bertelsmann GroupforPolicy countries havebeeninthepastpresentedto UkraineandMoldova. Similar matricesorlistsofreformstheEuropean Commissionexpectsfrompartner a networkofNGOsto promote theimplementationofEaPinitiatives. The NationalPlatform oftheEasternPartnershipCivilSocietyForum inAzerbaijanis 27 The European Commission’s recent offer of a 30 The EU should should EU The 26 29 To To To To 28

External Action Service or Commissioner Füle) to facilitate exchange of information and co-ordination of EU assistance for Azerbaijan.31

A concerted effort at the EU level to restrict the movement of those in Azerbaijan who violate human rights on a systematic basis is unlikely. But member states can take action individually and should follow the example set by the British government, which earlier this year adopted a new rule banning those non-EU nationals accused of human rights abuses from entering the UK.32 The UK took this measure even though it traditionally has good relations with the Azerbaijani government and London’s property market is the prime destination for investment by the Azerbaijani elite. The provision will hardly be enough to encourage the Aliyev regime to fully democratise, but it might significantly change the calculations for those in the ruling elite taking part in human rights violations.

As one of Azerbaijan’s most important partners, the EU should abandon the “lack of leverage” narrative. Europeans need to pursue a more vocal and bolder approach towards Baku. As this brief has argued, fears that the government would rebuff Brussels are ungrounded and mostly promoted by the regime itself: as the sustainability of Azerbaijan’s economic model is increasingly in doubt, the EU’s importance as a partner for Baku will grow. Unlike Lukashenka in Belarus, President Aliyev strives for international recognition and prestige. The EU should use the regime’s image-consciousness and voice its criticism more vocally when the government performs badly or cracks down on human rights and point out when it is falling behind its two South Caucasian neighbours and other Eastern Partnership states in order to increase the peer competition.

As Azerbaijan grows more authoritarian, Europe faces a choice. It can fully embrace this country and its society, which is proud of becoming the first-ever Muslim liberal democratic republic in 1918, or it can continue its condition- free dialogue with the regime. If it chooses the second option, in the medium term, it risks finding itself in the same position it was in the southern neighbourhood before the Arab Awakening: that of a quiet supporter of autocrats.

31 On the side of Azerbaijan, there is a National Coordinating Unit for EU Technical Assistance. 32 This relates to accusations based on “independent, reliable and credible evidence”. See Human Rights and Democracy: The 2011 Foreign and Commonwealth Office Report¸ available at http://fcohrdreport.readandcomment.com/wp-content/ uploads/2011/02/Cm-8339.pdf. 7 8 ECFR/57 May 2012 www.ecfr.eu THE EU AND AZERBAIJAN: BEYOND OIL About the authors the About Jana Kobzova is a Policy Fellow at the European Council on Journal ofDemocracy (2011) and (2011) Election the after Belarus and EU Leila Alieva a post-BRICRussia(2011). (2006) and and (2006) Foundation. She also helped establish the Slovak branch of branch Slovak the establish helped also She Foundation. Europe Wider its of coordinator the and Relations Foreign Democracy. Her publications include publications Her Democracy. NATO Defence College and the National Endowment for for Endowment National the and College Defence NATO Implications Security their and Caucasus South the in of the Center for National and International Studies. She has Pontis Bratislava-based the at programme democratisation outlets. She has co-authored various ECFR publications publications ECFR various co-authored has She outlets. the Woodrow Wilson Center, Johns Hopkins University, University, Hopkins Johns Center, Wilson Woodrow the the South Caucasus for various publications including the the including publications various for Caucasus South the co-authored has Jana Babel. Café webzine European the including she has also written about security, conflicts and politics in politics and conflicts security, about written also has she Eastern EU and Europe Eastern on chapters book several held research fellowships at Harvard University, Berkeley, Berkeley, University, Harvard at fellowships research held policy as well as articles for various journals and media media and journals various for articles as well as policy programme. Before joining ECFR, Jana led the Belarus Belarus the led Jana ECFR, joining Before programme. (2010), Europe Multipolar a of Spectre The is a Baku-based political analyst and the founder The EU and the South Caucasus South the and EU The andJane’sIntelligenceReview Integrative Processes Integrative Dealing with Dealing (2006) and and (2006) . The Acknowledgements Azerbaijan andintheEUwhilstresearchingthisstudy. Jarabik, Iva Dobchina, Jacqueline Hale, Hans Kundnani Kundnani Hans Hale, Jacqueline Dobchina, Iva Jarabik, They would also like to thank all those they interviewed in interviewed they those all thank to like also would They Balazs Wilson, Andrew thank to like would authors The and Nicu Popescu for their advice and editing of this brief. this of editing and advice their for Popescu Nicu and Among members of the European Council on Foreign Relations are John Bruton (Ireland) Hanzade Dog˘an Boyner Heidi Hautala (Finland) Former European Commission (Turkey) Minister for International Development former prime ministers, presidents, Ambassador to the USA; former Prime European commissioners, current Chair, Dog˘an Gazetecilik and Dog˘an Minister (Taoiseach) On-line Sasha Havlicek and former parliamentarians and (United Kingdom) ministers, public intellectuals, Ian Buruma (The Netherlands) Andrew Duff (United Kingdom) Executive Director, Institute for Strategic business leaders, activists and Writer and academic Member of the European Parliament Dialogue (ISD) cultural figures from the EU member Erhard Busek (Austria) Mikuláš Dzurinda (Slovakia) Steven Heinz (Austria) states and candidate countries. Chairman of the Institute for the Former Foreign Minister Co-Founder & Co-Chairman, Danube and Central Europe Lansdowne Partners Ltd Hans Eichel (Germany) Asger Aamund (Denmark) Jerzy Buzek (Poland) Former Finance Minister Annette Heuser (Germany) President and CEO, A. J. Aamund A/S Member of the European Parliament; Executive Director, Bertelsmann and Chairman of Bavarian Nordic A/S former President of the European Rolf Ekeus (Sweden) Foundation Washington DC Parliament; former Prime Minister Former Executive Chairman, United Urban Ahlin (Sweden) Nations Special Commission on Iraq; Diego Hidalgo (Spain) Deputy Chairman of the Foreign Gunilla Carlsson (Sweden) former OSCE High Commissioner on Co-founder of Spanish newspaper El Affairs Committee and foreign Minister for International Development National Minorities; former Chairman País; Founder and Honorary President, policy spokesperson for the Social Cooperation Stockholm International Peace FRIDE Democratic Party Research Institute, SIPRI Maria Livanos Cattaui Jaap de Hoop Scheffer Martti Ahtisaari (Finland) (Switzerland) Uffe Ellemann-Jensen (The Netherlands) Chairman of the Board, Crisis Former Secretary General of the (Denmark) Former NATO Secretary General Management Initiative; former International Chamber of Commerce Chairman, Baltic Development Forum; President former Foreign Minister Danuta Hübner (Poland) Ipek Cem Taha (Turkey) Member of the European Parliament; Giuliano Amato (Italy) Director of Melak Investments/ Steven Everts (The Netherlands) former European Commissioner Former Prime Minister; Chairman, Journalist Adviser to the Vice President of the Scuola Superiore Sant’Anna; European Commission and EU High Anna Ibrisagic (Sweden) Carmen Chacón (Spain) Member of the European Parliament Chairman, Istituto della Enciclopedia Former Minister of Defence Representative for Foreign and Security Italiana Treccani; Chairman, Centro Policy Studi Americani Jaakko Iloniemi (Finland) Charles Clarke Tanja Fajon (Slovenia) Former Ambassador; former Executive Gustavo de Aristegui (Spain) (United Kingdom) Member of the European Parliament Director, Crisis Management Initiative Diplomat; former Member of Visiting Professor of Politics, University Parliament of East Anglia; former Home Secretary Gianfranco Fini (Italy) Toomas Ilves (Estonia) President, Chamber of Deputies; President Viveca Ax:son Johnson Nicola Clase (Sweden) former Foreign Minister Ambassador to the United Kingdom; Wolfgang Ischinger (Germany) (Sweden) former State Secretary Joschka Fischer (Germany) Chairman, Munich Security Chairman of Nordstjernan AB Former Foreign Minister and vice- Conference; Global Head of Daniel Cohn-Bendit (Germany) Chancellor Government Affairs Allianz SE Gordon Bajnai (Hungary) Member of the European Parliament Former Prime Minister Karin Forseke (Sweden/USA) Minna Järvenpää (Finland/US) Robert Cooper Business Leader; former CEO Carnegie International Advocacy Director, Open Dora Bakoyannis (Greece) Society Foundation Member of Parliament; former Foreign (United Kingdom) Investment Bank Minister Counsellor of the European External Action Service Lykke Friis (Denmark) Mary Kaldor (United Kingdom) Leszek Balcerowicz (Poland) Member of Parliament; former Minister Professor, London School of Economics Professor of Economics at the Warsaw Gerhard Cromme (Germany) for Climate, Energy and Gender Ibrahim Kalin (Turkey) School of Economics; former Deputy Chairman of the Supervisory Board, Equality ThyssenKrupp Senior Advisor to the Prime Minister Prime Minister Jaime Gama (Portugal) of Turkey on foreign policy and public Lluís Bassets (Spain) Maria Cuffaro (Italy) Former Speaker of the Parliament; diplomacy Deputy Director, El País Maria Cuffaro, Anchorwoman, TG3, former Foreign Minister RAI Sylvie Kauffmann (France) Marek Belka (Poland) Timothy Garton Ash Editorial Director, Le Monde Governor, National Bank of Poland; Daniel Daianu (Romania) (United Kingdom) Olli Kivinen (Finland) former Prime Minister Professor of Economics, National Professor of European Studies, Oxford Writer and columnist School of Political and Administrative University Roland Berger (Germany) Studies (SNSPA); former Finance Ben Knapen (The Netherlands) Founder and Honorary Chairman, Minister Carlos Gaspar (Portugal) Minister for European Affairs and Roland Berger Strategy Consultants Chairman of the Portuguese Institute of International Cooperation GmbH Massimo D’Alema (Italy) International Relations (IPRI) President, Italianieuropei Foundation; Gerald Knaus (Austria) Erik Berglöf (Sweden) President, Foundation for European Teresa Patricio Gouveia Chairman, European Stability Initiative; Chief Economist, European Bank for Progressive Studies; former Prime (Portugal) Carr Center Fellow Reconstruction and Development Minister and Foreign Minister Trustee to the Board of the Calouste Gulbenkian Foundation; former Caio Koch-Weser (Germany) Jan Krzysztof Bielecki (Poland) Marta Dassù (Italy) Foreign Minister Vice Chairman, Deutsche Bank Group; Chairman, Prime Minister’s Economic Under Secretary of State for Foreign former State Secretary Council; former Prime Minister Affairs Heather Grabbe Bassma Kodmani (France) Carl Bildt (Sweden) Ahmet Davutoglu (Turkey) (United Kingdom) Executive Director, Arab Reform Foreign Minister Foreign Minister Executive Director, Open Society Institute – Brussels Initiative Henryka Bochniarz (Poland) Aleš Debeljak (Slovenia) Rem Koolhaas (The President, Polish Confederation of Poet and Cultural Critic Charles Grant (United Kingdom) Private Employers – Lewiatan Director, Centre for European Reform Netherlands) Jean-Luc Dehaene (Belgium) Architect and urbanist; Professor at the Svetoslav Bojilov (Bulgaria) Member of the European Parliament; Jean-Marie Guéhenno (France) Graduate School of Design, Harvard Founder, Communitas Foundation and former Prime Minister Deputy Joint Special Envoy of the University President of Venture Equity Bulgaria United Nations and the League of Ltd. Gianfranco Dell’Alba (Italy) Arab States on Syria. David Koranyi (Hungary) Director, Confindustria Delegation Deputy Director, Dinu Patriciu Eurasia Ingrid Bonde (Sweden) to Brussels; former Member of the Fernando Andresen Guimarães Center of the Atlantic Council of the CFO & Deputy CEO, Vattenfall AB European Parliament (Portugal) United States Head of the US and Canada Division, Emma Bonino (Italy) Pavol Demeš (Slovakia) European External Action Service Bernard Kouchner (France) Vice President of the Senate; former EU Senior Transatlantic Fellow, German Former Minister of Foreign Affairs Commissioner Marshall Fund of the United States Karl-Theodor zu Guttenberg (Bratislava) Ivan Krastev (Bulgaria) Franziska Brantner (Germany) (Germany) Chair of Board, Centre for Liberal Member of the European Parliament Kemal Dervis (Turkey) Former Defence Minister Strategies Vice-President and Director of István Gyarmati (Hungary) Aleksander Kwas´niewski Han ten Broeke Global Economy and Development, President and CEO, International (The Netherlands) Brookings. Centre for Democratic Transition (Poland) Member of Parliament and Former President spokesperson for foreign affairs Tibor Dessewffy (Hungary) Hans Hækkerup (Denmark) and defence President, DEMOS Hungary Mart Laar (Estonia) Former Chairman, Defence Minister of Defence; former Prime Commission; former Defence Minister Minister

9 Miroslav Lajcˇák (Slovakia) Marcelino Oreja Aguirre (Spain) Pierre Schori (Sweden) Deputy Prime Minister and Foreign Member of the Board, Fomento de Chair, Olof Palme Memorial Fund; Minister Construcciones y Contratas; former EU former Director General, FRIDE; former Commissioner SRSG to Cote d’Ivoire Alexander Graf Lambsdorff (Germany) Monica Oriol (Spain) Wolfgang Schüssel (Austria) Member of the European Parliament CEO, Seguriber Member of Parliament; former Chancellor Pascal Lamy (France) Cem Özdemir (Germany) Honorary President, Notre Europe and Leader, Bündnis90/Die Grünen Karel Schwarzenberg Director-General of WTO; former EU (Green Party) (Czech Republic) Commissioner Ana Palacio (Spain) Foreign Minister Bruno Le Maire (France) Former Foreign Minister; former Senior Giuseppe Scognamiglio (Italy) Minister for Food, Agriculture & Fishing President and General Counsel of the Executive Vice President, Head of Public World Bank Group Affairs Department, UniCredit S.p.A Mark Leonard (United Kingdom) Director, European Council on Foreign Simon Panek (Czech Republic) Narcís Serra (Spain) Relations Chairman, People in Need Foundation Chair of CIDOB Foundation; former Vice President of the Spanish Government Jean-David Lévitte (France) Chris Patten (United Kingdom) Former Sherpa to the President of the Chancellor of Oxford University and co- Radosław Sikorski (Poland) French Republic; former Ambassador to chair of the International Crisis Group; Foreign Minister THE EU AND AZERBAIJAN: BEYOND OIL the United States former EU Commissioner Aleksander Smolar (Poland) Juan Fernando López Aguilar Diana Pinto (France) Chairman of the Board, Stefan Batory (Spain) Historian and author Foundation Member of the European Parliament; Jean Pisani-Ferry (France) Javier Solana (Spain) former Minister of Justice Director, Bruegel; Professor, Université Former EU High Representative for the Adam Lury (United Kingdom) Paris-Dauphine Common Foreign and Security Policy & CEO, Menemsha Ltd Ruprecht Polenz (Germany) Secretary-General of the Council of the Member of Parliament; Chairman of the EU; former Secretary General of NATO Monica Macovei (Romania) Bundestag Foreign Affairs Committee Member of the European Parliament George Soros (Hungary/USA) Lydie Polfer (Luxembourg) Founder and Chairman, Open Society Emma Marcegaglia (Italy) Member of Parliament; former Foreign Foundations CEO of Marcegalia S.p.A; former Minister President, Confindustria Teresa de Sousa (Portugal) Journalist I´ñigo Méndez de Vigo (Spain) Charles Powell Secretary of State for the European (Spain/United Kingdom) Goran Stefanovski (Macedonia) Union Director, Real Instituto Elcano Playwright and Academic David Miliband Andrew Puddephatt Rory Stewart (United Kingdom) (United Kingdom) (United Kingdom) Member of Parliament Member of Parliament; Former Director, Global Partners & Associated Alexander Stubb (Finland) Secretary of State for Foreign and Ltd. Minister for Foreign Trade and Commonwealth Affairs Vesna Pusic´ (Croatia) European Affairs; former Foreign Alain Minc (France) Foreign Minister Minister President of AM Conseil; former Michael Stürmer (Germany) chairman, Le Monde Robert Reibestein (The Netherlands) Chief Correspondent, Die Welt Nickolay Mladenov (Bulgaria) Director, McKinsey & Company Ion Sturza (Romania) Foreign Minister; former Defence President, GreenLight Invest; former Minister; former Member of the George Robertson Prime Minister of the Republic of European Parliament (United Kingdom) Moldova Former Secretary General of NATO Dominique Moïsi (France) Paweł S´wieboda (Poland) Senior Adviser, IFRI Albert Rohan (Austria) President, Demos EUROPA - Centre for Former Secretary General for Foreign European Strategy Pierre Moscovici (France) Affairs Member of Parliament; former Minister Vessela Tcherneva (Bulgaria) for European Affairs Adam D. Rotfeld (Poland) Spokesperson and advisor, Ministry of Former Minister of Foreign Affairs; Foreign Affairs Nils Muiznieks (Latvia) Co-Chairman of Polish-Russian Group Council of Europe Commissioner for on Difficult Matters, Commissioner of Teija Tiilikainen (Finland) Human Rights Euro-Atlantic Security Initiative Director, Finnish Institute for International Relations Hildegard Müller (Germany) Norbert Röttgen (Germany) Chairwoman, BDEW Bundesverband Minister for the Environment, Luisa Todini (Italy) der Energie- und Wasserwirtschaft Conservation and Nuclear Safety Chair, Todini Finanziaria S.p.A Wolfgang Münchau (Germany) Olivier Roy (France) Loukas Tsoukalis (Greece) President, Eurointelligence ASBL Professor, European University Institute, Professor, University of Athens and Alina Mungiu-Pippidi (Romania) Florence President, ELIAMEP Professor of Democracy Studies, Hertie Daniel Sachs (Sweden) Erkki Tuomioja (Finland) School of Governance CEO, Proventus Foreign Minister Kalypso Nicolaïdis (Greece/ Pasquale Salzano (Italy) Daniel Valtchev, (Bulgaria) France) Vice President for International Former Deputy PM and Minister of Professor of International Relations, Governmental Affairs, ENI Education University of Oxford Stefano Sannino (Italy) Vaira Vike-Freiberga (Latvia)

www.ecfr.eu Daithi O’Ceallaigh (Ireland) Director General for Enlargement, Former President Director-General, Institute of European Commission International and European Affairs Antonio Vitorino (Portugal) Javier Santiso (Spain) Lawyer; former EU Commissioner Christine Ockrent (Belgium) Director, Office of the CEO of Telefónica Editorialist Europe Andre Wilkens (Germany) Director Mercator Centre Berlin and Andrzej Olechowski (Poland) Marietje Schaake Director Strategy, Mercator Haus Former Foreign Minister (The Netherlands) Carlos Alonso Zaldívar (Spain) Dick Oosting (The Netherlands) Member of the European Parliament Former Ambassador to Brazil May 2012 CEO, European Council on Foreign Klaus Scharioth (Germany) Relations; former Europe Director, Stelios Zavvos (Greece) Dean of the Mercator Fellowship CEO, Zeus Capital Managers Ltd Amnesty International on International Affairs; former Mabel van Oranje Ambassador of the Federal Republic of Samuel Žbogar (Slovenia) Germany to the US EU Representative to Kosovo; former

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An Audit of European Emerging Special Relationship Power at the UN The EU and Human Rights The EU and Human Rights at Matters for Europe Richard Gowan and Franziska at the UN: 2010 Review the UN: 2011 Review Hans Kundnani and Jonas Brantner, September 2008 Richard Gowan and Franziska Richard Gowan and Franziska Parello-Plesner, May 2012 (ECFR/08) Brantner, September 2010 Brantner, September 2011 (ECFR/55) (ECFR/24) (ECFR/39) Beyond Dependence: How to After Merkozy: How France and deal with Russian Gas The Spectre of a Multipolar How to Stop the Germany Can Make Europe Pierre Noel, November 2008 Europe Demilitarisation of Europe Work (ECFR/09) Ivan Krastev & Mark Leonard Nick Witney, November 2011 Ulrike Guérot and Thomas Klau, with Dimitar Bechev, Jana (ECFR/40) May 2012 (ECFR/56) Re-wiring the US-EU relationship Kobzova & Andrew Wilson, Daniel Korski, Ulrike Guerot and October 2010 (ECFR/25) Europe and the Arab Mark Leonard, December 2008 Revolutions: A New Vision for (ECFR/10) Beyond Maastricht: a New Democracy and Human Rights Deal for the Eurozone Susi Dennison and Anthony Shaping Europe’s Afghan Surge Thomas Klau and François Dworkin, November 2011 Daniel Korski, March 2009 Godement, December 2010 (ECFR/41) (ECFR/11) (ECFR/26) Spain after the Elections: the A Power Audit of EU-China The EU and Belarus after “Germany of the South”? Relations the Election José Ignacio Torreblanca and John Fox and Francois Godement, Balázs Jarábik, Jana Kobzova Mark Leonard, November 2011 April 2009 (ECFR/12) and Andrew Wilson, January (ECFR/42) 2011 (ECFR/27) Beyond the “War on Terror”: Four Scenarios for the Towards a New Transatlantic After the Revolution: Europe Reinvention of Europe Framework for Counterterrorism and the Transition in Tunisia Mark Leonard, November 2011 Anthony Dworkin, May 2009 Susi Dennison, Anthony Dworkin, (ECFR/43) (ECFR/13) Nicu Popescu and Nick Witney, March 2011 (ECFR/28) Dealing with a Post-Bric Russia The Limits of Enlargement-lite: Ben Judah, Jana Kobzova and European and Russian Power in European Foreign Policy Nicu Popescu, November 2011 the Troubled Neighbourhood Scorecard 2010 (ECFR/44) Nicu Popescu and Andrew March 2011 (ECFR/29) Wilson, June 2009 (ECFR/14) Rescuing the euro: what is The New German Question: China’s price?’ The EU and human rights at the How Europe can get the François Godement, November UN: 2009 annual review Germany it needs 2011 (ECFR/45) Richard Gowan and Franziska Ulrike Guérot and Mark Leonard, Brantner, September 2009 April 2011 (ECFR/30) A “Reset” with Algeria: the (ECFR/15) Russia to the EU’s South Turning Presence into Power: Hakim Darbouche and Susi What does Russia think? Lessons from the Eastern Dennison, December 2011 edited by Ivan Krastev, Mark Neighbourhood (ECFR/46) Leonard and Andrew Wilson, Nicu Popescu and Andrew September 2009 (ECFR/16) Wilson, May 2011 (ECFR/31)

11 ABOUT ECFR

The European Council on Foreign Relations (ECFR) is the first pan-European think-tank. Launched in October 2007, its objective is to conduct research and promote informed debate across Europe on the development of coherent, effective and values-based European foreign policy.

ECFR has developed a strategy with three distinctive elements that define its activities:

•A pan-European Council. ECFR has brought together a distinguished Council of over one hundred Members - politicians, decision makers, thinkers and business people from the EU’s member states and candidate countries - which meets once a year as a full body. Through geographical and thematic task forces, members provide ECFR staff with advice and feedback on policy ideas and help with ECFR’s activities within their own countries. The Council is chaired by Martti Ahtisaari, Joschka Fischer and Mabel van Oranje.

• A physical presence in the main EU member states. ECFR, uniquely among European think-tanks, has offices in Berlin, London, Madrid, Paris, Rome, Sofia and Warsaw. In the future ECFR plans to open an office in Brussels. Our offices are platforms for research, debate, advocacy and communications.

• A distinctive research and policy development process. ECFR has brought together a team of distinguished researchers and practitioners from all over Europe to advance its objectives through innovative projects with a pan-European focus. ECFR’s activities include primary research, publication of policy reports, private meetings and public debates, ‘friends of ECFR’ gatherings in EU capitals and outreach to strategic media outlets.

ECFR is backed by the Soros Foundations Network, the Spanish foundation FRIDE (La Fundación para las Relaciones Internacionales y el Diálogo Exterior), the Bulgarian Communitas Foundation, the Italian UniCredit group, the Stiftung Mercator and Steven Heinz. ECFR works in partnership with other organisations but does not make grants to individuals or institutions. www.ecfr.eu

The European Council on Foreign Relations does not take collective positions. This paper, like all publications of the European Council on Foreign Relations, represents only the views of its authors.

Copyright of this publication is held by the European Council on Foreign Relations. You may not copy, reproduce, republish or circulate in any way the content from this publication except for your own personal and non-commercial use. Any other use requires the prior written permission of the European Council on Foreign Relations

© ECFR May 2012.

ISBN: 978-1-906538-57-6

Published by the European Council on Foreign Relations (ECFR), 35 Old Queen Street, London, SW1H 9JA, United Kingdom

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